tv [untitled] March 27, 2012 9:30pm-10:00pm EDT
care and health care reform, my colleague from wisconsin, gwen moore. >> thank you so much, wasserman schultz. this is a very, very frightening day for me, i must say. and while sp so much for his si about reducing long-term debt i particularly as it relates to medicare seeks to balance our budget and our debt on the backs . this document here is an all ou chairman describe the need to end our cradle to grave welfare system. and to characterize this entitlement to welfare program is a first step in that. what this proposalentitlement,
make entitlement a dirty word, and end aofor our seniors and f withdisabilities. and would provide a voucher that would continue to lose its valu. so that wealthier and healthier seniors would be those who were lowin come seniors would find themselves at sk cover. it would protect their profit in the health care industrstockhol and heap more shift, more and more of the cost onto seniors. this is a that this budget and the house republicans have made, to really, as santorum said it so well last night, to tear government out by its roots and throw it out and
have government have nothing to do with protecting in this case seniors. >> i thank the the balance of >> i thank the ranking member that the chairman of the committee said something not too long ago is that i thinks his credibility in this epitire document. a dollar for ucit, political consultant that that i would pay off the deficit. i didn't realize there were that many political consultants in the world. if there are that's a big problem we address. or a million dollars. et, ny et closer. budget is a statement of our nation's values and priorities, and the repuan again fails to meet the american standard of balance, fairness, and shared democrats will unve a balanced deficit reduction plan where everybody pays their fair share and responsibility
doesn't just fall on those who can least afford wl offer amen to reduce the deficit by returning to clinton-era tax rates for incomes over a million dollars and by eliminating big companies that are making record profits, returning fairness and shared responsibility as defining values of our budget. the democratic proposals will ensuha anyerson who makes more than $200,000. they will ensure that middle income families do a higher effective tax rate than millionaires and billionaires. our proposals seek to protect medicare, medicaid, and the rest of our social safety net harmfu have proposed to pay for well c. the republican budget relies on the mythology that tax cuts for the wealthies promote economic growth. they would offer an average tax cut of a year for the wealthiest
this is faith-based economics, with repca en though there is no proof, no evidce th. an mythology to justify an inherent imbalance and unfairness in these budget priorities, choosing to corner more money with the wealthy while seniors, children, and the poor are made to shoulder an ever-increasing load. republicans also rely on myster refuse to share that is supposedly going to make their budget revenue neutral. for all the detail they've prydedn e they'll get their revenue, they might as well he cocktail napki. but i saved them the trouble. i did it for them. here's their bunt plan. tax ruts for the rich, shift -- the record but it would provide
too much detail for the document. our proposals make tough cuts to programs we can afford and strengthen medicare building on the affordable care act's policies. democrats have long been willing to make the difficult balanced demands. our nation's values are not reflected in a budget that places the heaviest burden on the backs of working families but one that invests in fairness and shared responsibility. reckless republican e, to budget and to adopt proposals that better reflect our nation's values of fairness and shared responsibility and amdments nec sure we have a vibrant and dynamic and prosperous nation into the future. i. >> i thank you mr. yarmuth. and i think you framed our closingti is not whether we develop a plan to reduce the
deficit. the question is whether we do it in a way that's balanced and calls for shared responsibility. and with that, mr. chairman, we >> all right. thank you. we will now proceed with the consideration fiscal year current 2013 concurrent resolution on the budget. the staff will give an overview of the budget. call a staff walk-through portion. i want to recognize direct a our policy director jonathan our budget analystrz wl be joining us as well and our chief counsel paul restusia for the purpose of considering the documents. the staff is avail t factual an questions but they are not here to enter into debate. that's what the members are so let me turn it over t staff. the general outlines of the
budget resolution. i think from talking to the minority staff the thought was . we'd be happy to review the overall mark -- >> in the interests of time why don't we turn it over to questions? mr. van hollen. >> thank you, mr. chairman. and my colleagues, this is our opportunity to ask specific questions related to the budget. and i'm going to start off, mr. chairman, with some. and i think everyone should understand that we received a copy of this budget just 24 hours, 24 hoursago. and i know that that procedure was similar to the procedure before. i hope going forward we can me whether you're republican or democrat that when you're talking about the budget of the united states of america everyone should have than 24 hours before they're convened at a session not only to debate
it but to vote on it. anyway, i'm just again who may we've only had 24h as a result f we have some questions about what is contained in this documeve.es. in your resolution revenues are $200 billion below the current policy baseline. i'm wondering what assuming tha about thatsu policy baseline we develop assumes the extension '01-03 tax relief. it assumes an amt current state tax law. that leads to about a $4.4 trillion difference inomhe curr. and that's what our revenue line
matches. there may be some differences with respect to extension ofout. but overall, our relative to th law baseline is a $4.4 trillion current law baseline. and there's no change relative to how we construct our current policy additional information that we posted on our website that shows how we crosswalk to the current policy agreement, i don't need to pursue this. with the understanding that if the information website doesn't result in a satisfactory answer to what is really a technical question, that we would be provided additional -- >> there's another potential -- john points out to me, th current policy baseline has dealt with the upper income levels differently. we asurnlgs as does omb, the permanent extension of all tax
relief. but we'll go ahead and follow up with your staff to see in terms exact assumption. but we have assumed permanent extension of all 2003, and again on amt the patch, the estate tax relief. >> with respect to the eitcd re eitc and the child tax credit, do you assumeensi of the 2001 portions of that indefinitely? >> i believe on the child credit yes. on eitc there are some cases with respect to some of the refundable credits where the recovery act provided some additional expansions on those. we do not ass ju the original ' laws. >> okay. just to be clear, with respect to the enhancements in the child tax credit, ei recovery act, you do not assume those? >> that's correct. >> okay.
with respect to the estate tax, do you assume repeal or do you assume estate tax as it was legislatio? >> the 2010 legislation is what weassume. >> now, with respect to the economic assumptions you use, do those track?cbo's economic assumption? >> we used the -- well, we used cbo's march baseline, and was c their january economicthat's wh budget resolution for the chairman's mark. >> so let me ask you with reven projections, do you use their approach to scoring or do you use so-called dynamic scoring as part of your budget? >> we u revenue numbers
from the congressional budget office. joint tax, as you know, is involved in actually doing numbers and our estimates are based onhe congressional budget office. >> now, with respect to y tax would drop the top tax rate from 35% where it is today to ou any analyses from joint tax showing that you can do that withou on middle-income taxpayers and do it in a way without making the tax code more an may want t respond to this more in terms of the policy assumptions in the mark and so forth. we've not gotten a specific analysis from the joint taxx re the chairman's mark provides more details on the specifics assumed there, butpeor asked fo
analysis on the distributional on how various deductions and credits and so forth were handled. >> what he ju just said we received as committee. we posted that on ouras well. asking for the inclusion of this policy in the budget, which is what we've done. to my knowledgehe they have not determined yet different break points, different tax expenditures and things likethhave to have thoses to get those kind of distribution runs. that's why youassume, and again me if i'm wrong, that as part of your extension of current policy that asrm effort as well you'd adhere to the position that you have in the past which is the capital gains rate would remain at 15%, is that correct? >> i don't believe the ways and
means letter specified what that rate would be. i think they put the income brackets, and i do not believe the ways and means -- >> specified that. the baseline we're operating off of where the net revenue change has no impact, assumes current capital gains and current dividend rates. >> but let me ask you this. as part of the -- does the tax reform proposal assume that the capital gains rate will remain at 15%? >> there can be a lot of issues that have to be resolved in terms of what happens in tax reform. the ways and means committee provided us with a top rate of 25% on individual and top of 25% on corporate. there will be a whole series of issues that are in terms of the details. they spelled out a lot of those particularly with respect to international issues there. in the letter they spent to us and the attachment they sent to us. what the budget resolution does,
it makes a series of ultimately congress can do or binds what the ways and means committee can do is what that revenue level is. so the overall assumption is to do tax return that holds revenues at 4.4 -- pardon me, holds revenues at the current policy level, which keeps about a 4 with the 4 trillion revenue increase scheduled under current law from occurring. in terms of getting into exactly what individual tax provisions are going to be the assumptions de oil. >> okay. the reason i ask, mr. chairman, is many of us have spent a look propscore that shows that you c reduce the top tax rate to 25% without increasing the burden on middle-income americans while holdinve say you do is because analyses just can't -- i'll get there. and we'little bit
about that later. let me ask you withrection 570. and i don't know if this is a question for forhe chairman. proposal you have there for -- whether you call it voucher or premium shurpt has a .5% of gdp.value of the support, so my is is that the i'm assuming if the proposal is to move a system where eon medi equivalent of a voucher, has premium support, that that isen. >> the policy mark is to move to a competitive bidding system of where there
woul a series of plans that would be offered as well as the traditional fee for option. we think that through competition lower bids coming in as a result of that process. so the way to plan, the assumption of the process is there would be a bidding process and you would take i think it's the lowest or second lowest bid as part of that cbo couldn't provide an estimate on that for us. they're working on that but in time for the chairman's mark they could not provide an estimate for it. so as a backstop if those bids did not come in lowthe premium support payment would be held to gdp plus .5%. which is the same level as what the re proposes for the ipab to achieve. >> i understand.
and we'll debate this later. thank you for your it reflects a fundamental with respect how we approach to the different approaches. with respect to -- in the mandatory -- excuse me. let me see here. if you could just ask -- this is the cbo paper that was the del republican budget plan is provi chairman and the staff. and it says on page 3 that medicare spending for new beneficiaries in 2023 would be set in an amount that works out to 7,500 in nominal dollarsar-oy going into the new sup program. and then in a footnote on page 8 cbo notes that this amount is $400 less cnstant dollars than projected medicare spending
for a 65-year-old in2023 under current law and $700 less than projected spending under a scenario that makes more realistic assumptions medicare physician payments. could you explain how you arrived at the amount that you gave to cbo? >> i may ask to get our medicare analyst here. let me just make a start and see if -- on that. again, ation with respect to the system that's set up, the policy is based onsyste. it would start, what, ten years out. we bndeve that competitiveidwe levels than whad happen under current law from the part d experience john reminds me about coming in, i think 40% so what we did is we looked at that. we had no way of -- cbo told us they couldn't estimate to us jse case is with respect to the growth rates going forward.
we then looked at some other analyses that had been done by others. and in terms of what happened in cup pet tiff m fixed amount. 2022. 2023. for making projections going understand it based on these outside analyses, yo ya $400 savings per beneficiary by launching this reform effort? justin basis for the number. sure, sure. >> yes, right. wasn't able to give ge program an estimate of the process we look to reports and historical
competitive bidding would have on average starting amount. the part d program came in 40% under budget. we also looked at studies that said we would take 6%. so, and the weren't able to get the bid from cob, we adjusted the payment. >> that savings, i factored into all the other projections in the out years with respect to the savings in this budget? in other words, the $400 savings built into the base year compounded over time ryes.. >> if you will ralcm scs was he to the merits of this approach how it would result going through cup pompetitive bidding.
cbo says they don't have tools in the toolbox measure these things. exceeding what we have here. but in,ativto we did this and then obviously with the growth, gdp plus is the bac. >> right. i haven't had a chance to do the math. don't know itch you have either. take the 00 savings per beneficiary times the number of reduction in medicare spending does that assume compared to what it would otherwise be? >> so --in the starting year? >> yes. >> so -- well we, once we move to the 2023, the only thing we have from cbo is percent of gdp. we don't have a nominal dollar savings of what the amount translates to. that's not something they can provide us. they are able to provide gdp.
>> right. in other words, i'm trying to, understand the logic here. figu what you presume the savings to be in the whole medicare program as a result of moving here i assume it is $400 times numethe number of ben fush eeficiaries system or transitioning. >> in the starting year of the program we are grandfathering the older population. the only people that are actually eligible for newt a calculation that e only 65 d would account for the total medicare beneficiaries. in the cohort, however many cohort, times $400. we don't know the exact number for that, no. >> if i of the, the ten-year numbers. if you could identify the policy
assumptions behind the llion, tn medicare mandatory spending in your budget and the dollar figures associated with those assumptions. >> we have, there are a couple of assumptions. thal liability reform which produces savings in that function. there assumption -- of -- means testing -- premiums for medicare. the same proposal is in the president's budget is you know resolution, we, the only thing binding on the committees are the-- the actual numbers. the allocations or -- or aggregates and so fort. but we go through the process of dic developing assumptions. >> if i could go through specifics because last year we had some of theseample, last ye
indicated that as part of proposal, that you -- you eliminated the -- provisions in would over time close the so-called part d donut hole.o t, this year as last year? >> in, in -- the budget assumes that all the expanti-- expansio the affordable care act are repealed. >> just to be clear then that obviously includes prescription drug donut hole and coverage of annual wellness visits and the, the other preventative services in the affordable care act. >> we assume the repeal of all the expansions in the affordable care act. >> go out. what does your budget do with respect to what we call aund here the sdr, do you fix it as part of your budget?
>> in -- there is a reserve fund in the budget resolution that provides for as long as the fix, doc fix or sustainable growth rate formula is in a deficit neutral manner it allows the chairman to adjust allocations and aggregates to accommodate, a fix for the, sgr.understand. i think fixing the sgr is north of $300 billion foyears. ize und ize -- you haven't identified a way to do it. but you have a says if you go out and find $300 billion of savings elsewhere in the budget you can use that for that right? >> correct. >> do you limit areas in the budget where the $300 billion in savings can be fono. >> okay. with respect to medicaidall, do you -- do yo
dispute the -- the cbo analysis that shows when it is fully, fully phased in, over time, that it would cut the medicaid budget base line budget by 75%? >> if you are talking baseline budget, we would not dispute that analysis. baseline has a huge amount of growth going into the medicaid it's both upped curreku under c 7%, beneficiary of a third.n ere is a large reduction. >> okay. he growth rates -- we won't go k you with respect to -- there is be, not -- not a discrepancy. a difference in the amount of
vii, achieve in the budget in certain functions and the amount of savings you call for throughocess. so for example in medicaid while your budget cuts medicaid by over $800 billion, over, over ten years, your instruction, energy and commerce which has jurisdiction is $97 billion. difference? >> the approach on reconciliation was toepce the sequester. under the chairman's total discretionary level would be reduced from 1047 to 1028 t $19 billion.lace the sequester in 2013 for discretionary spending is $78 billion. the deficit impact of the sequester, you get $78 billion in budget authority.
the actual savings in the first year from that. the chairman's mark was designed to achieve as much saving as possible in the, in the, early part of that window. but to cover over the ten-year period, at least, the $78 billion in a growing share. we did not assume the reconciliation of all of the mandatory savings assumed in the, in the -- in the resolution. instead what we did was, assume that we got -- as much as we possibly co of the deficit impact of that, replacing the savings in the first year. then over time we get multiples of what the -- what the savings are by virtue of reconciliation. we did not reconcile our assumed savings in medicaid or other areas of the budget. >> okay. and, let me ask you with respect to how the sequester dealt with medicare. do you assume the